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Value-Add Light Industrial Portfolio for Sale in Houston

Thursday, June 13, 2019

HFF, on behalf of the owner, is marketing a portfolio of 11 light industrial buildings totaling 381,278 square feet for sale in Houston’s North, Northwest and Central submarkets. The Houston Light Industrial Portfolio includes both dock-high and grade-level buildings. The infill portfolio is currently 72.3% leased, well below the average occupancy for Houston flex properties of 89.6%, which leaves significant room for new ownership to add value through lease-up.

Each of the three properties has direct access to Houston’s major thoroughfares. Corporate Park West is just over a quarter of a mile away from Interstate 10; Corporate Park Woodland is a single block away from Interstate 45; and Plaza Park lies directly at the Intersection of Highway 288 (South Freeway) and Loop 610, providing rare access to the Medical Center, which is only one mile away. Given this proximity, tenants desiring freeway visibility or accessibility will be attracted to each of these locations.

Light Industrial Portfolio for Sale Investment Highlights

Immediate Value-Add Potential: At 72.3% leased, the portfolio presents investors with the opportunity to immediately add value through lease-up of existing vacancy. Current portfolio performance is well below both the portfolio’s five-year average occupancy of 79.5% as well as the Houston market average, which is nearly 90%. This creates an opportunity to achieve significant long-term NOI growth.

Geographic Diversity: Widely dispersed across three different submarkets (North, Northwest and Central), the portfolio provides geographic diversification within one of the country’s fastest-growing markets. With the addition of more than one million residents to Houston's population since 2010, there continues to be an increase in tenant demand for this type of light industrial space across the market.

Rare Large-Scale Opportunity: There has been a dearth of comparable industrial transactions in Houston for more than two years. The Houston Light Industrial Portfolio provides investors with an opportunity to plant a flag or materially increase their footprint in one of the largest industrial markets in the country through a single transaction. Additionally, tenant size and build-out percentages provide immediate cashflow diversification.

Diverse Tenancy: The industrial portfolio for sale comprises many small suite tenants operating in a variety of industries rather than being dominated by a single tenant. With no tenant leasing more than 17,000 square feet of space, the portfolio provides a well-rounded rent roll with minimal rollover risk as only 32% of in-place tenancy expires in the first 18 months.